The IWF report calls upon policymakers to “help alleviate the unease in the current healthcare system and prevent a further increase in the number of Americans without health insurance,” through the adoption of five reforms:
- Reform the tax treatment of health insurance: Today’s tax code provides unlimited tax breaks for those who obtain coverage from the workplace but does not extend any comparable tax benefit to those who purchase coverage on their own. The way to solve this problem is through a refundable, advanceable tax credit to individuals who purchase coverage on their own.
- Expand coverage options: Individuals should have the freedom to decide the state and regulatory structure under which they purchase their health coverage.
- Improve consumer-directed models: Health Savings Accounts (HSAs) and other affordable alternative health insurance products should be available.
- Allow for greater employee-employer flexibility: Employers would have the option of moving from a defined-benefit system, where the employer sponsors a health plan, to a defined-contribution system, where the employer chooses to contribute to a worker’s own health plan.
- Reform healthcare entitlement programs: There is no doubt that current entitlement programs threaten to bankrupt our country. Policymakers can start by beginning to transform these entitlements, in this case, Medicare and Medicaid, from defined-benefit to defined-contribution programs along the lines found in the employer based pension system.